Increased investments in digital products and a decline in print advertising weighed on The New York Times Company's second-quarter earnings, as profit slipped 21 percent.
The company on Tuesday reported $55.7 million in adjusted operating profit for the quarter, which excludes some one-time costs. That amounts to 7 cents a share, falling short of the average analyst estimate of 8.5 cents, as compiled by Thomson Reuters. The Times reported $70.7 million in adjusted profit in the second quarter of 2013.
The number of digital subscribers, a growth area for the company, increased by 32,000 in the quarter. New products that offer additional benefits to digital subscribers — including the NYT Now app, an Opinion app and Times Premier — make up the bulk of that total. Paid subscribers to digital-only products totaled 831,000 at the end of the quarter.
Circulation revenue increased 1.4 percent, while revenue from syndication, conferences and other events rose nearly 8 percent. But total revenue decreased 0.6 percent, to $389 million, from $391 million in the period a year earlier, largely because of a 4.1 percent decline in advertising revenue. Net income dropped to about $9 million from more than $20 million in the second quarter of 2013.
"We saw continued growth in digital advertising and circulation revenues during the quarter," Mark Thompson, the company's chief executive, said in a statement, "but know that we still have more work to do to transform our business and deliver long-term sustainable revenue growth for the company."
The company plans to try to accelerate the growth of subscriptions to the new products, he said, and will "refine some of the offers and the way we market the portfolio to accomplish this."
Citing a recent innovation report, which recommended that the newsroom increase its engagement with online audiences, Mr. Thompson said the company's leadership believed it could "significantly grow our digital audience, which in turn will contribute to improved digital subscription and advertising monetization." Another new product, dedicated to cooking, will be introduced in the fall.
Operating costs increased more than 5 percent, to nearly $363 million, attributable to marketing costs for the new products, higher compensation and benefits expenses, and higher retirement costs.
The results for the quarter included two special items: a $9.5 million pension settlement and an income tax benefit that was "primarily due to a reduction in the company's reserve for uncertain tax positions."
Severance costs were listed at $2.2 million, a figure that most likely included any payment to The Times's former executive editor, Jill Abramson, who was dismissed in May.
Looking forward, the company said it expected circulation to remain flat, but for advertising to continue to decline "in the mid-single digits" in the third quarter, compared with the same quarter in 2013. Operating costs are expected to increase in the low- to mid-single digits.
Michael J. de la Merced contributed reporting.
source : http://rss.nytimes.com/c/34625/f/640316/s/3cf925ab/sc/2/l/0L0Snytimes0N0C20A140C0A70C30A0Cbusiness0Cdespite0Ecirculation0Egains0Eprofit0Efalls0E210Eat0Enew0Eyork0Etimes0Eco0Bhtml0Dpartner0Frss0Gemc0Frss/story01.htm
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